VA awards $3.86M lease for medical scope with service, sole-sourced to Olympus America Inc

Contract Overview

Contract Amount: $3,856,770 ($3.9M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-02-01

End Date: 2027-01-31

Contract Duration: 1,095 days

Daily Burn Rate: $3.5K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE

Place of Performance

Location: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90822

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.9 million to OLYMPUS AMERICA INC for work described as: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract covers a lease and service maintenance, indicating a need for ongoing support. 3. A firm-fixed-price contract type suggests predictable costs for the government. 4. The duration of 1095 days (3 years) provides a stable period for service delivery. 5. The award falls under a Blanket Purchase Agreement (BPA) Call, suggesting it's part of a larger existing agreement. 6. The specific product code (334510) relates to electromedical and electrotherapeutic apparatus manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this specific lease and service contract is challenging without comparable sole-source awards for similar medical scopes. However, the firm-fixed-price structure provides cost certainty. The total value of $3.86 million over three years suggests a significant investment in medical equipment, implying a need for advanced diagnostic or surgical capabilities. Further analysis would require understanding the specific type and capabilities of the medical scope being leased and comparing its features and service costs to market alternatives if competition were possible.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. This indicates that the Department of Veterans Affairs likely determined that only Olympus America Inc. could provide the required medical scope and service maintenance. The lack of competition means that the government did not benefit from a bidding process that could drive down prices through market forces. The justification for a sole-source award would typically involve factors such as unique capabilities, proprietary technology, or existing infrastructure compatibility.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to leverage market dynamics for cost savings.

Public Impact

Veterans receiving medical care will benefit from access to advanced medical scoping equipment. The contract ensures the availability of essential diagnostic and potentially surgical services within VA facilities. The geographic impact is primarily within California, where the contract is registered. The contract supports the maintenance and operational workforce associated with this specialized medical equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition may indicate a reliance on a single vendor, potentially creating future lock-in.
The specific nature of the medical equipment and service requires specialized knowledge, potentially limiting broader market participation.

Positive Signals

Firm-fixed-price contract provides cost certainty for the duration of the agreement.
The contract includes service maintenance, ensuring the equipment remains operational and reducing downtime.
Awarding under a BPA Call suggests an established relationship and streamlined procurement process for essential needs.

Sector Analysis

The medical equipment manufacturing sector, specifically electromedical and electrotherapeutic apparatus, is a critical component of the healthcare industry. This contract for a medical scope with service maintenance fits within the broader market for diagnostic and surgical equipment. The total contract value of $3.86 million over three years represents a significant investment, indicative of the high cost of specialized medical technology. Comparable spending benchmarks would typically involve analyzing other federal or large healthcare systems' procurements for similar high-value medical devices and associated service contracts.

Small Business Impact

This contract does not appear to have a small business set-aside. As it was awarded sole-source to a large corporation (Olympus America Inc.), there are no direct subcontracting opportunities for small businesses stemming from this specific award. The impact on the small business ecosystem is minimal, as the procurement did not aim to foster small business participation through set-asides or competitive bidding processes.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified equipment and services. Transparency is limited due to the sole-source nature of the award, with details of the justification for not competing typically available through agency procurement records. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Medical Equipment Leases
Service Maintenance Contracts
Department of Veterans Affairs Medical Supplies
Electromedical Apparatus Procurement

Risk Flags

Sole-source award
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.9 million to OLYMPUS AMERICA INC. MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is OLYMPUS AMERICA INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $3.9 million.

What is the period of performance?

Start: 2024-02-01. End: 2027-01-31.

What is the specific type and model of the medical scope being leased, and what are its key capabilities?

The provided data does not specify the exact model or type of medical scope. However, the North American Industry Classification System (NAICS) code 334510 indicates it falls under 'Electromedical and Electrotherapeutic Apparatus Manufacturing.' This broad category includes devices used for diagnosis, monitoring, and treatment, such as endoscopes, laparoscopes, or other specialized imaging and surgical instruments. To understand its capabilities, one would need to consult the contract's statement of work or technical specifications, which would detail its intended use, imaging resolution, surgical functionalities, and compatibility with other medical systems. Without this specific information, a precise assessment of its advanced features or limitations is not possible.

How does the $3.86 million total contract value compare to similar medical scope leases with service maintenance over a three-year period?

Directly comparing the $3.86 million value is difficult without knowing the specific type and capabilities of the medical scope. However, for high-end diagnostic or surgical scopes (e.g., advanced endoscopy, laparoscopy systems), such a price over three years, including comprehensive service, is within a plausible range for federal or large healthcare systems. The sole-source nature of this award, however, prevents a definitive value-for-money assessment against competitive market pricing. If this were a standard, widely available scope, competitive bids could potentially yield a lower price. The VA's justification for sole-source procurement would need to demonstrate that this price is fair and reasonable given the unique circumstances or vendor capabilities.

What are the specific risks associated with a sole-source award for critical medical equipment like a scope?

The primary risk of a sole-source award for critical medical equipment is the lack of price competition, potentially leading to inflated costs for taxpayers. This can also create vendor lock-in, making it difficult and costly to switch to alternative suppliers in the future, even if better technology or pricing becomes available. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single vendor's capabilities, which might not always represent the best overall value or technological advancement. Ensuring the justification for sole-source is robust and that the price is indeed fair and reasonable is crucial to mitigate these risks.

What performance metrics or service level agreements (SLAs) are included in the contract to ensure the quality of service maintenance?

The provided data does not detail the specific performance metrics or Service Level Agreements (SLAs) within the contract. Typically, a contract of this nature, especially one including service maintenance, would outline response times for service calls, equipment uptime guarantees, preventative maintenance schedules, and potentially penalties for non-compliance. The firm-fixed-price structure suggests the contractor is obligated to provide the service regardless of the exact number of service calls, but the quality and timeliness of that service would be governed by the detailed terms and conditions of the contract, which are not visible here. Verification of these SLAs would require reviewing the full contract documentation.

What is the historical spending pattern for similar medical scopes by the Department of Veterans Affairs?

Historical spending patterns for similar medical scopes by the Department of Veterans Affairs are not detailed in the provided data. To assess this, one would need to analyze past VA contracts for electromedical apparatus (NAICS 334510) or specific types of scopes (e.g., endoscopes, laparoscopes). This analysis would reveal trends in contract types (competed vs. sole-source), average contract values, durations, and the primary vendors utilized. Understanding historical spending can help identify if this $3.86 million award represents an increase or decrease in investment, or if there's a pattern of sole-source awards for such equipment, which could indicate systemic issues with competition or a reliance on specific technologies.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Electromedical and Electrotherapeutic Apparatus Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3500 CORPORATE PKWY, CENTER VALLEY, PA, 18034

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $6,429,159

Exercised Options: $3,856,770

Current Obligation: $3,856,770

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26219A0033

IDV Type: BPA

Timeline